ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Budget Deficits Are Forever

The success or otherwise of the various measures the state and central governments have taken to reduce fiscal deficits has to be understood in the light of the increasing indifference of our legislators to the issue and the carelessness seen in the preparation of budget documents. These measures are evidently not backed by political will.

The annual report of the ministry of parliamentary affairs for 1999-2000 makes disturbing reading. During the year covered by the report, parliament was so busy with other matters that it had hardly any time to look at the budget at a time when the fiscal deficit had reached frighteningly high levels. Paragraph 5.4 of the report says that out of 72 hours during which the 186th session of the Rajya Sabha met, 36 hours were lost through interruptions and adjournments due to disorderly scenes. Nearly one-fifth of the time of the 4th session of the 12th Lok Sabha was lost due to similar reasons. According to press reports, last year’s budget was voted and approved in less than half an hour. The report of the ministry of parliamentary affairs says that the demands for grants were voted on April 22, 1999 without specifying how much time the Lok Sabha took over it. But we are told that the Rajya Sabha spent five minutes over the budget. It is no wonder that government is drowning in debt and deficit when parliament could spare only half an hour to approve spending nearly Rs 3,00,000 crore of public money.

The pattern of legislative behaviour and indifference to management of public finances is the same in most state governments also. We should therefore not be surprised that the central and state governments together will have an estimated total fiscal deficit of about Rs 2,00,000 crore at the end of the current financial year. Rs 2,000 of deficit per capita? Yes, that is the tragic fact. What happens in the Kerala legislative assembly will give some idea of how budgets are generally handled in many of the state governments at a time when government employees have to go without salary for days in some states as the treasury is empty. Kerala has been a trend-setter in budgetary matters. It set up subject committees to examine the budget in detail about 20 years ago, long before the parliament did so. The president of India praised Kerala for this when he inaugurated the new Kerala assembly building – the largest and most expensive of its type in the country, which cost about Rs 90 crore. There are arrangements for simultaneous translation of the assembly proceedings into three languages though everyone speaks Malayalam. But the per capita debt in Kerala is one of the highest in the country and the government is on the verge of bankruptcy. It has to borrow money to pay the salaries of its employees in some months. How does the assembly handle the budget when the state is passing through the worst financial crisis in its history? During the recent budget session, the assembly approved the budget without discussion in 25 minutes as some of the MLAs sat on the floor of the assembly chamber in satyagraha, carrying placards and shouting slogans. In many states the copies of the budget documents given to the MLAs are thrown away as garbage. Some of the budget documents that the state governments exchange with each other are sold as waste paper without even opening the bundles.

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